Market Trends of Saudi Arabia Prefab Wood Buildings Industry
This section covers the major market trends shaping the Saudi Arabia Prefab Wood Buildings Market according to our research experts:
The Growing Hospitality Sector is Driving the Market
Saudi Arabia's interest in wooden modular construction is gaining traction recently. In addition, the country witnessed growth in the adoption of modular buildings, for instance, Amana group was awarded a contract to construct a 150-room hotel for The Red Sea Development Company (TRSDC) with prefabricated structures. In addition, wooden prefab building construction has a long list of benefits, and it can be completed in 30% less time than more traditional construction methods.
Moreover, modular structures are witnessing significant demand because, they can be completely constructed on manufactured plants, and work delays due to weather conditions were almost negligible. In addition, site preparation can take place while the modular building is being constructed and, because they are typically completed in shorter timeframes, costs less when compared to conventional structures.
Meanwhile, the sustainability factors involved in the hospitality construction sector also promote wooden prefab building installation. As adoption of new methods, such as off-site modular construction, is helping the hospitality sector to reduce its carbon footprint significantly. Moreover, hotel construction projects are on the rise in the country. In 2022, Riyadh had the highest share of hotel construction projects in Saudi Arabia. Thus, the growing hospitality sector is expected to drive the demand for wooden modular buildings manufacturing.
Increasing Demand for Housing Units Fuelling the Market Growth
In 2022, as per industry experts, Saudi Arabia's housing demand is expected to witness a growth rate of more than 50%, reaching 153,000 houses by 2030 from 99,600 dwellings in 2021. In addition, the kingdom planned to create nearly 1.2 million new homes to reach a housing stock of 4.96 million houses by 2030. The increasing demand will drive the wooden prefabricated homes adoption in the country.
Moreover, under Vision 2030, the kingdom made remarkable progress in transforming its housing sector in the past decade. Also, the country planned to achieve more than 70% of home ownership under this vision. In addition, government initiatives and financing policies are bolstering the housing market growth. However, the Saudi Central Bank played a vital role in the housing sector's growth, by reducing the minimum down payment from 30% to 5% of the purchase price and offering numerous home loans.
Meanwhile, along with improving financing in the sector, the kingdom has encouraged the involvement of the private sector, particularly to develop affordable housing in the country. This initiative will boost the prefabricated wooden structures installations in the country. Moreover, in Q2 2021, the residential market's housing stock in Riyadh amounted to more than 1.3 million units, followed by Jeddah with 856,000 housing units.
